IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>On 19 December, Bloomberg reported that KKR has emerged as a frontrunner to privatise <a href="https://www.smartkarma.com/entities/taiyo-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15154:1" rel="noopener">Taiyo Holdings (4626 JP)</a>, but “the tender offer price may be lower than the current price.”</li>
<li>Since the first Bloomberg article on 27 May, Taiyo’s shares are up 84% vs. the median peers’ shares, which are up 62%. Therefore, the shares reflect some takeover premium.   </li>
<li>Based on the medium-term management plan, which is likely KKR’s base case, I estimate a tender offer of around JPY4,624, 1.2% below the last close.</li>
</ul>


On 19 December, Bloomberg reported that KKR has emerged as a frontrunner to privatise Taiyo Holdings (4626 JP), but “the tender offer price may be lower than the current price.”
Since the first Bloomberg article on 27 May, Taiyo’s shares are up 84% vs. the median peers’ shares, which are up 62%. Therefore, the shares reflect some takeover premium.   
Based on the medium-term management plan, which is likely KKR’s base case, I estimate a tender offer of around JPY4,624, 1.2% below the last close.


Taiyo Holdings (4626 JP): An Impending KKR Takeunder?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/taiyo-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15154:1" rel="noopener">Taiyo Holdings (4626 JP)</a> shares were up 19.1% based on a <a href="https://news.bloombergtax.com/private-equity/taiyo-holdings-gets-buyout-proposals-from-firms-including-kkr" target="_blank" rel="noopener">Bloomberg report</a> that it received privatisation proposals from KKR and Nippon Sangyo Suishin Kiko. </li>
<li>Taiyo confirmed that it has received privatisation offers. The Board would view privatisation as a solution to rid itself of Oasis, which has recently waged an <a href="https://www.corpgovfortaiyo.com/taiyo-corp-gov" target="_blank" rel="noopener">activist campaign</a>. </li>
<li>At the last close price of JPY6,230, Oasis would be up 45.9% on its highest price of JPY4,720. My analysis suggests that an offer around JPY7,000 can be justified.</li>
</ul>



Taiyo Holdings (4626 JP) shares were up 19.1% based on a Bloomberg report that it received privatisation proposals from KKR and Nippon Sangyo Suishin Kiko. 
Taiyo confirmed that it has received privatisation offers. The Board would view privatisation as a solution to rid itself of Oasis, which has recently waged an activist campaign. 
At the last close price of JPY6,230, Oasis would be up 45.9% on its highest price of JPY4,720. My analysis suggests that an offer around JPY7,000 can be justified.


Taiyo Holdings (4626 JP): Privatisation Interest as Oasis Agitates

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Due to uptrend violations for the Nasdaq 100, S&amp;P 500, and Russell 2000 we continue to believe near-term consolidation is likely -- potentially something similar to what the market experienced between June and early-July. In today’s report we highlight attractive Groups and stocks within Consumer Discretionary &amp; Materials: Retailers, Footwear, Retailers, Teenagers, Metals, Steel, Integrated, Non-U.S., and Chemicals, Diversified.

Due to uptrend violations for the Nasdaq 100, S&amp;P 500, and Russell 2000 we continue to believe near-term consolidation is likely -- potentially something similar to what the market experienced between June and early-July. In today’s report we highlight attractive Groups and stocks within Consumer Discretionary &amp; Materials: Retailers, Footwear, Retailers, Teenagers, Metals, Steel, Integrated, Non-U.S., and Chemicals, Diversified.

U. S. Equity Strategy: Bull-Bear Battle Continues

As bullish developments pile up, the weight-of-the-evidence continues to support our belief that we may be in the early stages of a broad-based advance. There are some developments that leave us wanting more, but we are inching toward an outright bullish outlook. In today’s report we outline our U.S. investment thesis, and highlight attractive Groups and stocks within Health Care, Materials, and Manufacturing: Biotech, Large-Cap, Aluminum, Chemicals, Diversified, and Fluid Technology &amp; Power.

As bullish developments pile up, the weight-of-the-evidence continues to support our belief that we may be in the early stages of a broad-based advance. There are some developments that leave us wanting more, but we are inching toward an outright bullish outlook. In today’s report we outline our U.S. investment thesis, and highlight attractive Groups and stocks within Health Care, Materials, and Manufacturing: Biotech, Large-Cap, Aluminum, Chemicals, Diversified, and Fluid Technology &amp; Power.

U.S. Equity Strategy: Small-Caps Testing Critical Resistance; Downgrading Communications

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

Following up on our previous insight, our discussion with the company lead us to remain positive on the stock despite some valuation concerns.<ul>
<li>Within an industry where pressure to consolidate appears to be growing, we find Kansai Paint's relatively restrained approach to be the least risky. Our view is that cost-synergies are likely to be limited outside of the decorative paints market and are unlikely to be exceedingly large even there.</li>
<li>Buying brands and scale is not in and of itself a negative…</li>
</ul>

Following up on our previous insight, our discussion with the company lead us to remain positive on the stock despite some valuation concerns.
Within an industry where pressure to consolidate appears to be growing, we find Kansai Paint's relatively restrained approach to be the least risky. Our view is that cost-synergies are likely to be limited outside of the decorative paints market and are unlikely to be exceedingly large even there.
Buying brands and scale is not in and of itself a negative…


Kansai Paint: Emerging Markets Exposure, M&A and Gearing to a South African Recovery

United States

Huntsman Corporation manufactures differentiated and commodity chemical products.  The Company markets a broad range of chemical products and formulations to a diversified group of consumer and industrial customers. Huntsman's products are used in a range of applications, including those in adhesives, aerospace, automotive, construction products, and consumer products.

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Huntsman Corp (HUN US)

Taiyo Holdings (4626 JP): An Impending KKR Takeunder?

Based on the medium-term management plan, which is likely KKR’s base case, I estimate a tender offer of around JPY4,624, 1.2% below the last close....

Arun George

Taiyo Holdings (4626 JP): Privatisation Interest as Oasis Agitates

The Board would view privatisation as a solution to rid itself of Oasis, which has recently waged an activist campaign. My analysis suggests that...

Arun George

U. S. Equity Strategy: Bull-Bear Battle Continues

Due to uptrend violations for the Nasdaq 100, S&P 500, and Russell 2000 we continue to believe near-term consolidation is likely -- potentially...

Vermilion Research

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As bullish developments pile up, the weight-of-the-evidence continues to support our belief that we may be in the early stages of a broad-based...

Vermilion Research

Kansai Paint: Emerging Markets Exposure, M&A and Gearing to a South African Recovery

Following up on our previous insight, our discussion with the company lead us to remain positive on the stock despite some valuation...

Mio Kato

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